What actions are Crawlspace Medic franchisees prohibited from taking that could be considered injurious to the goodwill associated with the Crawlspace Medic marks and system?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
ed training, trade secrets, Confidential Information and rights, Franchisee and each Principal, if any, covenant that, except as otherwise approved in writing by Franchisor:
- 19.5.1. During the term of this Agreement, Franchisee and each Principal, if any, shall not, either directly or indirectly, for themselves or through, on behalf of, or in conjunction with, any person or entity (i) divert, or attempt to divert, any business or customer of the Franchised Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any crawlspace or basement service business similar to the System; or (iii) seek to employ any person who is at that time employed by Franchisor or otherwise induce such person to leave his or her employment; or (iv) do or
perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (v) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Crawlspace Medic franchisees or Franchisor-affiliated outlets.
- 19.5.2. Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Franchisee and Principals, if any, shall not, either directly or indirectly, for themselves or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of the Franchised Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; or (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any crawlspace or basement service business within twenty-five (25) miles of the Territory or any Crawlspace Medic location; or (iii) seek to employ any person who is at that time employed by Franchisor or otherwise induce such person to leave his or her employment or (iv) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (v) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Crawlspace Medic franchisees.
- 19.6. Reasonableness of Restrictions.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic Franchise Disclosure Document, franchisees are restricted from performing any action that could be detrimental to the goodwill associated with the Crawlspace Medic marks and system. Specifically, during the term of the agreement, franchisees cannot divert business or customers to competitors, participate in similar crawlspace or basement service businesses, or attempt to employ individuals employed by Crawlspace Medic.
These restrictions are designed to protect the Crawlspace Medic brand and maintain the integrity of the franchise system. Any action that interferes with or jeopardizes the business of Crawlspace Medic or its franchisees is prohibited. This includes direct actions that harm the brand's reputation or disrupt the operations of other franchisees within the system.
After the agreement expires or terminates, the franchisee is still restricted for 24 months. During this time, they cannot divert business, participate in similar businesses within 25 miles of their territory or any Crawlspace Medic location, or solicit Crawlspace Medic employees. These post-termination covenants aim to prevent franchisees from leveraging the knowledge and experience gained during their franchise term to unfairly compete with Crawlspace Medic.
Crawlspace Medic also requires that a Covenantor (likely an employee) shall not at any time, directly or indirectly, do any act or omit to do any act that would or would likely be injurious or prejudicial to the goodwill associated with the System. This extends the responsibility for protecting the brand's goodwill beyond just the franchisee to include those working within the franchise.